Data Shows Thats Cannabis Edibles Brands In The U.S. Are BOOMIN

Data Shows Thats Cannabis Edibles Brands In The U.S. Are BOOMIN

Last week, we came across an article that was published by MJ Biz Daily that covered the performance of the cannabis sector in 2020.

One of the most interesting statistics from the report is related the amount of edibles that were sold in 2020 and this is a trend that our readers should be aware of. Companies that are levered to the vertical have worked to modify the business to capitalize on the increased demand for edibles and we will monitor how these operators are able to execute

The increase in demand for edible product have accelerated the pace at which edibles manufacturers are investing in research and development (R&D) as well as new product lines. We expect 2021 to be a banner year for the edible market as consumers started to show a preference for smokeless cannabis products in 2020.

The acceleration in R&D on cannabis edibles has forced leading manufacturers to work on the development of faster-acting and strain-specific edibles. We believe the amount of time it takes to feel the effects of edibles has improved and expect brands to benefit from the development of these types of products.

Data Highlights the Increasing Demand for Edibles

According to Seattle-based cannabis analytics firm Headset, demand for medical and recreational cannabis edibles increased by 60% across seven state markets to $1.23 billion from $767 million in 2019.

According to Headset data analyst Cooper Ashley, market share for edibles increased to 11.07% in 2020 from 10.65%. We find these data points to be significant and expect the vertical to report stronger growth in 2021.

Headset also provided interesting data on the Michigan cannabis market and this is an opportunity that we have been closely following. Last year, the state’s recreational cannabis market opened, and we are impressed with the performance of it. According to Headset, Michigan recorded a 14% increase in sales of edible products. The firm said that edibles’ market share in Michigan increased from 14.4% to 16.5% and this is trend to be aware of.

Some of the key data points that Headset provided on the Michigan market include:

  1. Vape pens lost market share (from 24% to 20.1%)
  2. Flower increased market share (from 41.1% to 46.4%)
  3. Concentrates lost market share (from 9.6% to 7.7%)

During the last year, Michigan was one of the highly talked about cannabis markets and we expect the state to report strong growth this year. At the country level, we expect to see a similar trend play out as it relates to the mix of products that are being sold.

The US Cannabis Market is Accelerating Rapidly

Following the election of Joe Biden as President of the US and the democrats gaining control of the House of Representatives and the Senate, the cannabis industry is positioned to be a beneficiary of the changing of the guard.

Since the election, the cannabis sector has been in rally mode and we are seeing much smarter money enter the industry. Based on the outcome of the election, banks are starting to notice that the US cannabis market is the most attractive place to invest. While Canada is currently dominating in the international cannabis market, the US industry is expected to be the world’s largest cannabis market in the years to come.

We continue to prefer operators that are levered to states like Illinois or Michigan due to the limited number of licenses that are available. States like Florida, New York and Pennsylvania, are also limiting the number of cannabis licenses that are being granted and this plays a key role in our bullish outlook on these markets.

One of the reasons we are favorable on the cannabis edible market is related to the economics that are associated with it. To manufacture edibles, companies use cannabis extracts as the input product. Since these products are made with cannabis oil, the quality of the flower that is used to make the edibles does not come into question. We are of the opinion that this aspect of the process makes the cannabis edible vertical even more attractive from a margin appreciation standpoint and are favorable on the growth prospects that are associated with it.

If you are interested in learnings more about the companies that are capitalizing on the cannabis edible market, please send an email to with the subject “Cannabis Edibles” to be added to our distribution list.


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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Fri, 22 Jan 2021 11:30:07 +0000